LoCorr Files for Hedged Equity ETF With Dynamic Options Strategy

LoCorr Fund Management has filed for the LoCorr Hedged Equity ETF, an actively managed fund seeking long-term capital appreciation through S&P 500 exposure while mitigating downside risk. Sub-advised by Passaic Partners, the ETF will invest in S&P 500-tracking ETFs and futures, alongside a tactical options overlay primarily using long puts for downside protection. The strategy employs a proprietary quantitative model that analyzes market volatility, including VIX levels, implied volatility term structure, and skew, to adjust equity exposure and options positioning. During periods of elevated volatility, the fund may reduce equity exposure and sell covered options to offset hedging costs. Options typically have maturities of four to twelve weeks, with portfolio structures generally reassessed monthly. The fund aims to capture long-term equity gains with lower volatility than a traditional S&P 500 investment.